Global Fraud Detection and Prevention Market Report and Forecast 2024-2032

Global Fraud Detection and Prevention Market Outlook

The global fraud detection and prevention market size was valued at USD 42.11 billion in 2023. The market is further projected to grow at a CAGR of 23.3% between 2024 and 2032, reaching a value of USD 277.38 billion by 2032.

Key Takeaways

• With revenue rising steadily from 14.37 billion USD in 2016 to 63.50 billion USD in 2023, the fraud detection and prevention (FDP) market has experienced significant growth in recent years.

• There were 440,666 reported cases of credit card fraud in 2022, up 13% from 2021.

• Amazon and Google are the most impersonated brands in phishing attempts (13%), followed by Facebook and WhatsApp (9%), Netflix (2%), and Apple (2%).

• To combat fraud, two-factor phone authentication is used by 44% of online retailers.

Fraud detection and prevention is the process of identifying and preventing fraudulent activities that can cause financial loss or reputational damage to individuals, organisations, or systems. Fraud detection and prevention solutions use various techniques such as data mining, machine learning, anomaly detection, and biometric authentication to detect and prevent fraud in various domains such as banking, insurance, e-commerce, healthcare, and government.

The growing prevalence of digital platforms and services, the frequency of identity theft and cyberattacks, the strict regulatory compliance requirements, and the growing awareness of the advantages of fraud detection and prevention among consumers and businesses are some of the factors propelling the of the fraud detection and prevention market growth.

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Key Trends and Developments

Advancements in fraud detection technologies, increase in digital payments, and high integration of biometric authentication are boosting the market growth

Global Fraud Detection and Prevention Market Trends

With technology improvements making it easier to access data and make payments, concerns about digital frauds are rising, which is driving the demand for the fraud detection and prevention. Globally, the complexity of financial crimes, cyberattacks, and digital frauds is posing a threat to the expansion of many enterprises. The number of incidents involving identity theft, data breaches, and payment fraud are rising along with the use of e-banking, digital payment apps, and cross-border transactions. Such factors are paving the way for fraud detection and prevention market expansion.

Moreover, a lot of traffic comes at once from digital channels like social media and e-commerce applications. This makes it challenging to quantify and recognise patterns of unusual traffic, which, in turn, makes fraud detection and prevention solutions necessary. Another fraud prevention trend is the advancements in technologies for precisely identifying and tracking real-time aberrant activity across applications and the internet. This is supporting the fraud detection and prevention market development during the forecast period.

In addition, increase in the number of internet users, growing online payment start-ups, and rising adoption of digital transactions are anticipated to propel the market. Moreover, the rapid growth in demand for machine learning and artificial intelligence with the help of big data analytics, and the increasing demand for cloud services are expected to favour the fraud detection and prevention market growth in the forecast period.

Overall, the increasing adoption of fraud detection and prevention solutions across various industries, such as banking, insurance, retail, e-commerce, healthcare, and government, to protect against cyberattacks, identity theft, money laundering, and other fraudulent activities shows that the fraud detection and prevention market outlook will be positive in the future.

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Market Segmentation

Global Fraud Detection and Prevention Market Report and Forecast 2024-2032 offers a detailed analysis of the market based on the following segments:

BFSI segment to exhibit the fastest growth rate in fraud detection and prevention market due to the rapid digitisation of banking services

As per the fraud detection and prevention market analysis, the BFSI segment is expected to witness the fastest growth rate over the forecast period. The rapid digitisation has made the banking and financial services industry an easy target for cybercriminals for frauds like SMS phishing, identity thefts, spyware and adware, cyberstalking, and website cloning. The growing trend of consumers using digital platforms for investing in stockbroking, mutual funds, and insurance has forced companies to implement fraud detection and prevention systems to eliminate fraudulent activities. For example, artificial intelligence-based fraud detection will reduce the workload of bankers and owners as it can automatically verify the authenticity of important documents by using pattern matching algorithms.

The retail and healthcare industry, on the other hand, are expected to witness a substantial fraud detection and prevention market share. The retail industry faces various challenges in managing fraud risks, such as online payment fraud, return fraud, loyalty fraud, and coupon fraud. Fraud detection and prevention solutions help retailers to verify the identity and authenticity of customers, transactions, and products, and to reduce losses and increase customer satisfaction.

Meanwhile, the healthcare industry is exposed to various forms of fraud, such as insurance fraud, prescription fraud, medical identity theft, and billing fraud. Fraud detection and prevention solutions help healthcare providers, payers, and intermediaries to verify the identity and eligibility of patients and providers, to validate claims and reimbursements, and to prevent abusive practices.

Furthermore, IT and telecom industries are also vulnerable to various types of frauds, such as subscription fraud, roaming fraud, SIM cloning, revenue leakage, and phishing. Solutions in fraud prevention market helps IT and telecom service providers to monitor and analyse network traffic, customer behaviour, and billing data, and to detect and prevent fraudulent activities and anomalies.

Internal and external frauds hold a significant fraud detection and prevention market share due to rising incidents of frauds within organisations

Internal fraud covers frauds carried out by employees, managers, or executives within an organisation. Internal fraud can include stealing, misappropriating, bribing, conspiring, or falsifying financial data. Whereas external fraud covers frauds carried out by customers, vendors, hackers, or other external parties that target an organisation. External fraud can include impersonating, deceiving, infecting, credit card fraud, money laundering, or cyberattacks.

Due to the rising cases of internal and external frauds, there has been an increased demand for advanced and comprehensive solutions that can address these frauds. Another impact of internal and external frauds on the fraud detection and prevention market is the increased awareness and regulation of fraud prevention among organisations. For example, many governments have enforced stricter regulations and guidelines for fraud prevention, such as the Sarbanes-Oxley Act, the Anti-Money Laundering Directive, or the General Data Protection Regulation (GDPR). These regulations create more opportunities for the fraud detection and prevention market, as companies seek solutions that can help them comply with the regulatory requirements and best practices.

Competitive Landscape

Market players are offering distinct fraud detection and prevention solutions, such as software, services, analytics, and biometrics, catering to different industry verticals and use cases.

Other key players in the fraud detection and prevention market include ACI Worldwide Inc., BAE Systems plc, Fair Isaac Corporation (“FICO”), NICE Ltd., LexisNexis Risk Solutions Group, Transunion LLC, Fiserv, Inc., and Fidelity National Information Services, Inc. (FIS), among others.

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Global Fraud Detection and Prevention Market Analysis by Region

North America holds the largest market share due to the presence of major players, such as IBM, SAS, and Oracle Corporation

According to fraud detection and prevention market report, North American region leads with the highest market share. A rise in the number of cases comprising identity thefts, payment frauds, and money laundering across Canada and the U.S. is contributing to the growth of the market in this region. Additionally, the growing investments by major organisations to improve IT security infrastructure and protect data breaches are increasing the fraud detection and prevention market size in this region.

Furthermore, the North American region has a high penetration of advanced technologies, such as artificial intelligence, machine learning, big data analytics, and cloud computing, which enable the development and adoption of sophisticated fraud detection and prevention solutions. Moreover, the region has a strict regulatory framework and compliance standards, such as the Payment Card Industry Data Security Standard (PCI DSS), the Sarbanes-Oxley Act (SOX), and the Health Insurance Portability and Accountability Act (HIPAA), which mandate the implementation of fraud detection and prevention measures in various industries.

Europe has the second-largest fraud detection and prevention market share due to the rising frequency of cyberattacks, identity theft, money laundering, and payment fraud, which has sped up the transition to online transactions and remote working. As a result, the region has a high demand for fraud detection and prevention solutions. Furthermore, the region boasts a robust regulatory landscape and consumer protection legislation, including the General Data Protection Regulation (GDPR), the Anti-Money Laundering Directive (AMLD), and the Payment Services Directive (PSD2). These laws mandate that various entities, including banks, payment service providers, e-commerce platforms, and government agencies, implement fraud detection and prevention solutions.

Asia Pacific fraud detection and prevention market, on the other hand, is rapidly growing as the region has a huge potential for fraud detection and prevention solutions due to the rapid growth of digitalisation, e-commerce, fintech, and mobile payments, which create a large volume of data and transactions that are vulnerable to fraud. Furthermore, the region has a rising awareness and demand for fraud detection and prevention solutions among various sectors, such as banking, insurance, telecom, healthcare, retail, and government, which are investing in enhancing their security and fraud management capabilities.

Key Highlights of the Report